China bashing could impair relations

China bashing is reaching fever pitch in the US presidential elections as the candidates try to shore up their positions in the crucial mid-west manufacturing state of Ohio just under six weeks from polling day.

Seeking to consolidate a steadily widening lead in key swing states, President
Barack Obama
is swamping Ohio with advertising labelling his Republican rival
Mitt Romney
a “hypocrite" for investing in China while accusing the President of being “soft" on the emerging giant.

Mr Romney, desperate to claw back into contention as the mid-west manufacturing states of Ohio, Michigan and Wisconsin slip farther from his grasp, has accused Mr Obama of acting belatedly on the Chinese threat to US auto parts makers.

US unemployment has been above 8 per cent for 43 months, and many Americans blame cheap production and outsourcing, primarily concerning China. Economists say American consumers benefit from cheaper inputs and technology is the biggest cause of lost jobs.

Last week the President visited Ohio to announce that the US government was taking China to the World Trade Organisation over $US1 billion of alleged subsidies to Chinese auto parts makers, which have taken a $US10 billion bite out of the US market.

This week the President’s campaign returned Mr Romney’s fire. It released a web video purporting to show “Mitt Romney’s hypocrisy on China" and accusing him of investing in Chinese firms that steal American videos and pirate Microsoft’s software. “He says China is stealing American ideas and technology. But when it comes to making money, Chinese companies suit Romney just fine. He invested in the Chinese version of YouTube – a haven for stolen American videos," the video says.

“Romney’s even invested in a Chinese electronics company being sued by Microsoft for pirating its software. If Romney really wanted China to stop stealing, why would he send them his money?"

Back campaigning in Ohio on Wednesday, the President again took Mr Romney to task over China.

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“He’s been talking tough on China. He says he’s going to take the fight to them; he’s going to go after these cheaters," Mr Obama said.

“And I’ve got to admit, that message is better than what he’s actually done about this thing. It sounds better than talking about all the years he spent profiting from companies that sent our jobs to China."

Mr Obama told the crowd he had “woken up every single day doing everything I can to give American workers a fair shot in this global economy".

“We’ve brought more trade cases against China in one term than the previous administration did in two and, by the way, we’ve been winning those cases. We’ve stood up for auto workers against unfair trade practices.

“When Governor Romney said stopping an unfair surge in Chinese tyres would be bad for America, bad for our workers, we politely declined his advice. We went after China on that, and we got over 1000 American workers back to work producing American tyres."

The Obama administration slapped punitive tariffs on imported Chinese tyres in May, drawing criticism from economists who said it would only raise the cost of tires for American consumers.

The Obama campaign has previously labelled Mr Romney a “pioneer of outsourcing “ and this week circulated a Boston Globe article that details investments in Chinese sweat-shop style factories by Bain Capital when Mr Romney was CEO.

Mr Romney for his part has vowed to be tougher than Mr Obama and to use his executive powers to label China a “currency manipulator" on day one of his presidency.

What effect this has on US-Chinese relations is unclear. China is a perennial whipping boy in American politics but the rhetoric has been turned up this year to a level that could impede bilateral relations.

US Treasury Under Secretary for International Affairs Lael Brainard travels to Beijing this week to urge Chinese officials to expand opportunities for U.S. workers and businesses through a more level playing field and stronger domestic demand-led growth.

The Obama campaign’s attacks on Mr Romney’s China investments seem to be doing their bit for his re-election.

From being too close to call several weeks ago the manufacturing states of Ohio, Michigan and Wisconsin have blown out to leads of 5 to 8 percentage points for Mr Obama.